ASIC is suing Finder Wallet for providing unlicenced financial services.
ASIC claims the Finder Earn product closely resembled a debenture.
Finder Wallet stopped providing the service to its customers last month.
ASIC sues Finder Wallet for providing unlicenced services
The Australian Securities and Investment Commission (ASIC) announced on Thursday, December 15th, that it had sued Finder Wallet, a subsidiary of comparison website Finder.com, over a crypto-linked yield product.
The Australian financial watchdog revealed that it sued the platform for alleged unlicensed conduct and inadequate risk disclosure.
ASIC is suing Finder Wallet for providing Finder Earn, a product that was offered between February and Nov. 10, 2022. The product saw Finder Wallet convert user deposits in Australian dollars into an Australian dollar-linked stablecoin called TAUD. Finder proceeds to use the stablecoin as working capital.
Finder Wallet offered Australian users interest rates on deposits of 4.01% and 6.01%. According to ASIC, Finder Earn resembles a debenture and Finder Wallet should have acquired appropriate licences before providing the product to Australians.
ASIC deputy chair Sarah Court said;
“This is ASIC’s third recent action against a firm offering a crypto-asset-related product that we consider to be a financial product. Our message to the industry is clear — just because an offer involves a crypto-asset-related product does not guarantee it will fall outside the current regulatory regime.”
ASIC drops the hammer on FTX
ASIC is suing Finder Wallet despite the platform stop offering the product on November 24. Finder Wallet returned all funds to customers after ASIC informed the company of concerns about the product.
The suspension came following the collapse of the parent FTX cryptocurrency exchange.
The bear market continues to affect the operations of numerous cryptocurrency companies. Earlier this month, Australian crypto exchange Swyft, announced that it had cut 45% of its total workforce as revenue dropped due to the bear market.